Cooperation Under the Risk of Capture

Abstract: How does the possibility of embezzlement affect cooperation in public goods dilemmas? Through lab-in-the-field experiments with village residents in Tanzania, I show that voluntary contributions to a public good decrease when a group member is able to capture such contributions for private gain. Yet, cooperation does not break down. A plausible explanation is that among village residents, the collective expectation exists that others will exert voluntary restraint when dealing with their co-villagers contributions to a public good. Consistent with this hypothesis, a second, simultaneous experiment reveals that contributed group resources are embezzled to a lesser extent than windfall resources that are provided by the experimenter.